VANCOUVER, British Columbia, March 3, 2014 (GLOBE NEWSWIRE) -- Recent analysis on the American marijuana marketplace by ArcView Angel Investors forecast a 64% surge in the legal U.S. cannabis market to $2.34 billion in 2014. It also estimates that the five-year national market could grow to $10.2 billion amid rising demand and potentially new state markets.
Needless to say, this burgeoning market requires the expertise of seasoned business people to provide venture capital, management expertise, education and to act as facilitator for this explosive new industry.
Who better to build the infrastructure of this new industry than a group of savvy mining execs? That's right, mining execs.
A hundred and fifty years ago, Harry Barr's (President and CEO of Next Gen Metals (CSE:N) ancestors began farming in the Ottawa Valley. As far back as pre WWII, the family farm was producing hemp, which in those days was used primarily for rope.
At 23, a young Harry Barr graduated from the University of Guelph in Agribusiness and began a career that forged him into a global mining executive and financier. Barr rightly notes that since 1985, every exploration company he has started is still in business today.
Barr's company has seized the opportunity to incubate and mentor those legal marijuana and hemp companies that have the technical savvy, but require the business acumen that any new or expanding industry needs; be it fundraising, complex negotiation skills, capital markets expertise, public company administration or IPO's.
"Recent legal changes have convinced us that this emerging, multi-billion dollar market would benefit from our expertise," states Barr. "We are looking at several proposals and intend to raise capital for the best of them in exchange for an equity interest, a sales royalty or both. I am confident we will be able to provide compelling returns for all parties, but in particular our Next Gen shareholders."
In Canada, regulation changes on April 1st 2014 will allow licensed producers to grow Medical Marijuana on a commercial scale. Health Canada conservatively estimates the market could be worth $1.3 billion by 2024. Industry analysts see that number doubling that forecast by 2016 to $2.6 billion. Added to the US forecasts, the North American market should top $5 billion-plus by 2016.
Medical Marijuana is currently legal in 20 US states, with Colorado and Washington State recently decriminalizing recreational use. Undoubtedly, the trend is moving in one direction—and quickly.
Management of Next Gen is very good at raising capital. The Company intends to extend its brand to this industry and is actively seeking and reviewing new business plans. It intends to be a leader in the space and the go-to Company for legal marijuana and industrial hemp investments.
Barr states: "A growing proportion of the medical community believe that Medical Marijuana and more specifically cannabinoids have the potential to help patients who are suffering from a variety of ailments and illnesses. Next Gen's vision is to be a leading provider of venture capital, management expertise, education and act as a facilitator for this important new industry."
Barr is also the driving force of the International Metals Group (IMG) a brain bank of project acquisition, exploration and development professionals, including dedicated CEOs, geologists, engineers, corporate finance and investor relations experts, corporate managers, public company administrators, and regulatory and government affairs specialists.
To date, IMG companies (past and present) have completed over 300 option/joint venture agreements with major, mid-tier and junior companies and have raised over $250,000,000 to advance their projects throughout 9 countries.
In Ontario, Barr's Pacific Northwest Capital made a grass roots discovery on its River Valley Platinum Group metal property, which is now a multi-million ounce deposit.
As well, in Bathurst New Brunswick, Mr. Barr's El Nino Venture's has a large land position partnered with Glencore Canada. El Nino has a tri-party agreement in with both Glencore and Votorantim Metals Canada, a subsidiary of Votorantim Metals, which is Brazil's second largest mining company. Earlier this week, El Nino announced a winter drill program on this project.
From 2011 to 2013 Votorantim and El Nino drilled out and established the biggest and newest NI 43-101 resource and completed a preliminary economic assessment (scoping study) on their Murray Brook deposit in the Bathurst mining camp.
The legal marijuana and hemp space needs to be organized quickly and with the utmost expertise. One only has to look at the Marijuana Index (^MMJ), which has had a volatile 52-week range between 5.30 and 76. After some spikes in late 2012, volume has been steadily growing and the index sits at 69 today. The index is comprised of a basket of 29 stocks, weighted by market cap. There is obviously significant opportunity for Next Gen's leadership as the industry matures.
Criteria for inclusion in the index include a public equity listing, market cap of at least $1 million and demonstrated business interests within the marijuana, Medical Marijuana, hemp, or cannabis industry, either through revenue, management, customers, products, services, or publicly announced business plans or stated intentions.
There is little chance that growth in this space will retreat anytime soon. The majority of support for the legalization exceeds 50% in Boomers and hits 65% for Millennials. From 1969 to 2013, legalization of marijuana supporters grew from 12% to 52%. Those wanting it to remain illegal dropped from 84% to 45% in the period. (source)
Investors need to ensure that they have the right equity exposure to this area, which means taking a hard look at both management and business plans. With Next Gen's decades of experience as successful financiers and infrastructure builders, it appears an excellent group to provide the leadership necessary to build shareholder value in this relatively untapped arena.
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